Brevan Howard, Jamison Hedge Funds Said to Advance During Commodities Rout
The Brevan Howard Asset Management LP Headquarters
Chris Ratcliffe/Bloomberg
The Brevan Howard Commodities Strategies Master Fund Ltd., which managed $368 million as of March 31, gained 1.1 percent in the first week of May, an investor report obtained by Bloomberg showed.
The Brevan Howard Commodities Strategies Master Fund Ltd., which managed $368 million as of March 31, gained 1.1 percent in the first week of May, an investor report obtained by Bloomberg showed. Photographer: Chris Ratcliffe/Bloomberg
Hedge funds run by Brevan Howard Asset Management LLP and Jamison Capital Partners LLC rose last week during the biggest commodities rout in two years, according to a report to investors and people familiar with the figures.
The Brevan Howard Commodities Strategies Master Fund Ltd., which managed $368 million as of March 31, gained 1.1 percent in the first week of May, an investor report obtained by Bloomberg showed. Jamison’s Koppenberg Macro Commodity Fund Ltd., which manages more than $600 million, advanced about 4 percent, said two people with direct knowledge of the matter, declining to be identified because the information is private.
Stephen Jamison, founder and chief investment officer of New York-based Jamison Capital, declined to comment when contacted by phone. Nagi Kawkabani, co-chief executive officer of Brevan Howard, said the fund had been cutting positions in energy, judging this year’s 25 percent gain in prices excessive.
“It seemed everybody was long,” Kawkabani said by phone May 11. “It was just our view that the positioning, the almost universal bullishness and seeming inevitability of ever-rising commodity prices, was a little bit disturbing.”
Commodities beat stocks, bonds and the dollar for five consecutive months through the end of April, the longest run in at least 14 years. That reversed as economic reports showing slower growth in U.S. service industries and fewer German manufacturing orders increased investors’ concern about growth and drove the Standard & Poor’s GSCI Index of 24 commodities down 11 percent in a week, the most since December 2008.
Clive Capital
“The thing that stuck out to us was that volatility was relatively cheap, and it made sense to hedge given the moves in prices that had occurred,” Kawkabani said.
Speculators cut their net-long position, or bets on higher prices, in U.S. commodity futures by 2.4 percent in the week ended May 3, two days into the rout. The next data from the Commodity Futures Trading Commission are set for later today.
Clive Capital LLP’s commodity hedge fund, which managed $5.1 billion as of May 1, lost 8.9 percent last week mostly because of bullish bets on oil, according to two people with knowledge of the matter. The Clive Fund Ltd.’s Class B shares returned a compounded 20 percent annually since they started in May 2008, according to an investor report obtained by Bloomberg.
Thirty percent of 1,263 investors surveyed in the quarterly Bloomberg Global Poll this month said they intend to reduce investments in commodities over the next six months and almost one in three of those questioned say they will hold more cash.
The Brevan Howard Commodities Strategies Master Fund is managed by Geneva-based Stephane Nicolas, the head of Brevan Howard’s commodities desk. He joined the firm in 2004 and became a partner in 2007. Prior to that, Nicolas ran the energy options desk for Bank of America Corp. from 2001 to 2004.
Jamison previously worked for Blenheim Capital Management LLC, joining Morgan Stanley in 1995. He left the bank in 2008.
The S&P GSCI gauge climbed 0.8 percent as of 11:17 a.m. London time today, heading for a weekly increase of 1.9 percent.
The commodities market is going through “a rough patch” on weakness in macroeconomic data that will begin to subside next month, Jeffrey Currie, Goldman Sachs Group Inc.’s head of commodity research, said today in an interview in London.
To contact the reporters on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net; Jesse Westbrook in London at jwestbrook1@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
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